Public Bill Committee

[Jim Sheridan in the Chair]

Jim Sheridan: We shall begin with clause 1. I suggest members of the Committee make any remarks they may have about clauses 2 to 6, the schedule and the four amendments to the long title during that debate. If the Committee is content with that suggestion, at the appropriate point I will put the question that clauses 2 to 6 and the schedule stand part of the Bill and then the question on the amendments formally, on the basis that all parts of the Bill and the amendments will already have been debated. Is that acceptable?

Hon. Members: Aye.

Clause 1  - Registers of persons seeking to acquire land to build a home

Question proposed, That the clause stand part of the Bill.

Jim Sheridan: With this it will be convenient to discuss the following:
Clauses 2 to 6 stand part.
That the Schedule be the Schedule to the Bill.
Amendment 1, title,line1, leave out “local” and insert “certain public”

This Amendment amends the long title to reflect the contents of the bill as published.
Amendment 2, title,line2, leave out from beginning to “land” and insert “associations of individuals who wish to acquire serviced plots of”

This Amendment amends the long title to reflect the contents of the bill as published.
Amendment 3, title,line3, leave out “custom-build” and insert “custom housebuilding”

This Amendment amends the long title to reflect the contents of the bill as published.
Amendment 4, title,line3, leave out from “to” to end of line 8 and insert “place a duty on certain public authorities to have regard to those registers in carrying out planning and other functions.”

This Amendment amends the long title to reflect the contents of the bill as published.

Richard Bacon: Mr Sheridan, may I start by saying what a pleasure it is to serve under your chairmanship? The Bill garnered all-party support and the support of the official Opposition and the Government on Second Reading on 24 October.
The Self-build and Custom Housebuilding Bill aims to make it easier for prospective self-builders and custom builders to seek a suitable plot of land to build or commission their own home by requiring local authorities to establish a register of prospective self-builders and custom builders seeking land, and to have regard to demand for custom build as evidenced by the register in the exercise of planning and other key functions.
Clause 1 is the heart of the Bill. It will require local planning authorities to maintain a register of individuals, or groups of individuals, who wish to acquire a serviced plot of land on which to build a home of their own. The aim of the statutory register for custom builders and self-builders is straightforward. It will ensure that all local planning authorities have a clear understanding of the anticipated demand for self-build and custom build housing in their local area, so that it can be taken into account as they prepare local plans and take action to support new house building.
Although some authorities are actively promoting self-build and custom build, many prospective self-builders and custom builders across the country are frustrated by the lack of suitable plots being made available, and are often concerned that local planning authorities are not doing enough. Having a statutory register will increase the transparency about local demand for self-build and custom build, and I want the register to become, over time, an established mechanism for helping to determine local housing need, similar to the local affordable housing register.
The register will also form a cornerstone of the Government’s proposals for a new right to build, which the Department for Communities and Local Government has been consulting on, and I am sure the Minister for housing and planning will want to elaborate further on how the register fits in with his wider proposals for this new right.
The clause has been drafted to allow flexibility so that the final statutory framework for local registers can take on board views from the consultation and the practical experience from the vanguard councils, which are already testing the establishment of local registers which the Government are supporting. The clause prescribes only the broad framework for the register, while the detail will be left in regulations to take account of different circumstances, which may range from a rural area with a market town to a dense urban area or a national park, which may also be a planning authority.
Specifically, the clause emphasises that all local registers will need to cover individuals and groups of individuals who wish to build or commission their own home. The latter category is particularly important. Although group custom build remains novel in this country, the experience from Berlin and elsewhere suggests that group custom build can offer low-cost solutions to young families and other groups in dense urban areas who may otherwise struggle to afford to buy a home. Group custom build has also been used successfully to create homes for affordable rental through housing co-operatives in Berlin and elsewhere.
The clause also makes it clear that local registers should cover both traditional self-builders who proactively wish to build their own home and custom builders who commission specialist builders to build their home to their design. Crucially, the clause requires local authorities to publicise the register so that prospective self-builders and custom builders are aware of it.
The clause sets out the relevant authorities that will be subject to the duty to maintain a local register. Those include shire and metropolitan district councils, unitary councils, London boroughs and national park authorities, all of which are responsible for preparing local plans. However, the Secretary of State will also have an order-making power allowing him to designate other public authorities as the relevant authority for that duty, which will allow greater flexibility for specific areas. For instance, given the Mayor’s strategic planning responsibilities, it might be appropriate to have bespoke arrangements in London, which involves the Greater London authority.
The schedule sets out the framework for the regulations that will govern the detailed operation of the register. In particular, the schedule allows the Secretary of State to make regulations about the form and content of the register, including the amendment, removal and renewal of entries; the eligibility criteria for applications to be entered on to the register, including age, nationality, primary residence and connection to the area; the information to be contained in applications to be entered on to the register, for instance preferences about size, cost and location of plot; and the process for reviewing decisions on applications that have been refused entry on to the register or removed from it.
The schedule also allows the Secretary of State to make regulations on the payment of fees in relation to the register. That is to ensure that local authorities do not attach exorbitant fees to the register so it is open to all prospective custom builders wishing to acquire their own plot of land to build their own home. It also has the concomitant effect of ensuring that, in the long run, local authorities can cover any costs arising from this. The Department has pledged to cover the initial expected costs of £5 million, but the rule about fees is that they are to protect both local authorities and potential custom and self-builders.
Clause 2 is the duty to have regard, which is the second key element of the Bill. It places a new duty on local authorities to have regard to the register when exercising their planning, housing, regeneration and land disposal functions. It aims to require local authorities to consider the demand for custom build on the register when, for instance, they are developing their local plans, regenerating their town centres or old industrial sites, or disposing of surplus public land.
In the case of local planning, that new duty builds upon existing national planning policy and practice guidance. It emphasises that local planning authorities should take account of the local demand for custom build when preparing their local plans and identifying their five-year housing supply sites so that sufficient land for custom build is brought forward. The clause also gives the Secretary of State an affirmative regulation-making power allowing him to extend the duty to have regard to other public authorities. That is particularly aimed at other public bodies, such as the GLA or development corporations, which can exercise significant planning, housing or regeneration functions.
Clause 3 requires local authorities to have regard to any guidance issued by the Secretary of State relating to their duties under the Bill to maintain a register and in the exercise of their planning and other relevant functions. Such a power to issue statutory guidance by the Secretary of State is often a feature of the statutory framework for new local authority functions, especially if they are complex. In this case, the power to issue statutory guidance is intended to support local authorities in their administration of the register, complementing the regulations on, for instance, the wider publicity of the register.
Statutory guidance will play a particularly important role in setting the framework for the duty to have regard to the register so that local authorities have a clear and common understanding of expectations. Although, ultimately, the content of the statutory guidance is of course a matter for Ministers, I would expect it to emphasise that the duty to have regard should be interpreted proportionately and should not place unnecessary burdens on local authorities.
The remaining clauses are largely procedural. They set out the parliamentary procedures for the regulations, define key terms used in the Bill and set out the extent, commencement and short title of the Bill. I will not go into the details other than to point out that the regulations concerning how local authorities may charge fees in connection with the register, and which allow other public authorities to be specified as the relevant authority to keep the register or have regard to it, will be subject to the affirmative procedure to enable further parliamentary scrutiny, as they either involve money or alter the statutory functions of public bodies.
A “serviced plot of land” is defined as
“a plot of land which satisfies such requirements about utilities and other matters”
as specified in regulations. That is to enable the regulations to define what the scope of a serviced plot of land is for the purpose of the register. For example, a serviced plot of land might technically be able to include a derelict building in need of regeneration. The Secretary of State will bring the Bill’s substantive provisions into force by commencement order.
Finally, I have tabled technical amendments to change the long title of the Bill so that it will state, “A Bill to place a duty on certain public authorities to keep a register of individuals and associations of individuals who wish to acquire serviced plots of land to bring forward self-build and custom housebuilding projects and to place a duty on certain public authorities to have regard to those registers in carrying out planning and other functions.” The amendments reflect the aims of the published Bill on Second Reading, which are narrower in scope than the long title that I presented on First Reading in July. I urge the Committee to agree that these clauses and the long title amendments stand part of the Bill.

Emma Reynolds: It is, as always, a pleasure to serve under your chairmanship, Mr Sheridan. I congratulate the hon. Gentleman on his Bill. I know he spent a lot of time working on it prior to the ballot for private Members’ Bills. As expressed on Second Reading, the official Opposition will support his Bill in Committee today.
I commend the National Custom and Self Build Association for its work in this area. I have a personal interest, given that my first home was a self-build home designed and commissioned by my father. The Labour party supports the custom and self-build sector, which is mentioned in the Lyons review, which we commissioned. It is particularly important because it is part of trying to create a more diverse and competitive industry, and driving up the quality of housing is something we discussed on Second Reading.

Meg Hillier: Does my hon. Friend agree that such measures can also help to drive up diversity of provision and better use of space, because people who pay and build themselves think much more creatively? In my own borough, we have seen some very innovative projects—not necessarily self-build—brought forward by private individuals.

Emma Reynolds: I agree. Such homes can be more innovative. Many of those that I have seen are more energy efficient, because residents who commission out the design of the homes to custom builders, or who do it themselves, have a longer-term stake in those homes. That is what drives up the quality, as well as the innovation.
Some international examples are instructive and interesting. All the homes in Almere in the Netherlands look quite different, which gives a sense of community. Not everything is uniform in the way that some housing developments are, which gives people in their communities a way better to express their own preferences, architectural or otherwise, and they can make for very attractive communities.
The hon. Gentleman went through specific provisions in detail. I will not go through every detail and clause, but I will say that it is right to create a register. That is something I called for in my first major speech as shadow Housing Minister in January this year.
It is right that local authorities should have regard to such a register when carrying out their housing and planning functions and responsibilities and, critically, as the hon. Gentleman mentioned, when developing their local plan. My hope is that the register will go part of the way to boost the sector. However, there will have to be more structural and fundamental reforms to the way the land market, planning and the nature of the industry work for custom and self-build to take off.
In addition to the register, we would like to see better provision in planning for smaller sites. That would allow local plans to have regard to the register in a more meaningful way. Unfortunately, in some cases we see local authorities going for the easier option of commissioning bigger sites to bigger developers, which squeezes out innovation and fails to provide the opportunities we would all like to see for custom and self-build.
We would like to give local authorities more power to be proactive in assembling that land, rather than reactive and seeing what comes forward, or commissioning large chunks of land to volume house builders. We have suggested in particular the innovations of housing growth areas and new homes corporations. We think they could be critical in promoting more diversity in the housing market, including custom and self-build.
We have also recommended a more efficient planning process for small sites, which in conjunction with the register could help a fast-track red-lining of sites of between one and 10 homes. That could facilitate not only small builders but this type of custom and self-build.
Beyond land and planning, for this type of building to take off, small builders need to get back into building many more homes. Unfortunately, through successive recessions, small builders have been particularly hard hit. We suggested a way in which Treasury guarantees could help underwrite loans to small builders. Again, working in conjunction with the register that this legislation will provide, that will also promote custom and self-build.

Meg Hillier: One of the big brakes on both bigger house builders, including housing associations, and small builders is the length of time involved. A purchaser cannot get a mortgage a long way in advance of the building being completed. Does my hon. Friend have comments on what she may be doing on that?

Emma Reynolds: The Government have recognised that the ways of financing custom and self-build are still problematic. In my experience, building societies seem to be more open to accepting that as a different construct—excuse the pun. It seems that some of the more traditional banks are very wary of the risks involved. We need not only to try to de-risk the process as much as possible, but to work closely with the banking industry to see what can be done to make such mortgages more easily accessible. Currently, that is one of the key barriers, along with land and planning related to it. I agree with my hon. Friend that finance is a key barrier, and I know the Government are looking at that.
To return to my point about small builders, in order to promote custom and self-build we have to ensure that small builders are getting access to finance, as well as those who will commission the new homes. Since the global financial crash we have seen banks not discriminating between small builders, but considering them all too risky and putting them into one category. That has had a dire effect on builders, some of whom have gone out of business. Others have had to go for much more costly and risky financing. We need to find a way to help those small builders. Our proposal for Treasury guarantees to underwrite loans to small builders would, in conjunction with the register, help promote custom and self-build.
In closing, I would like to point out that we are way behind our European competitors, and other countries in the world. In Canada, France, Germany and the United States custom and self-build delivers in excess of 40% of housing output. In other countries, such as Austria, it is up to 80% of homes. We are nowhere near that scale.
I was interested in the hon. Gentleman’s example of Berlin where groups of individuals do this together. I know there are some projects in our country bringing forward groups, but it is quite unusual and I would like to see it promoted. There are good examples of some local authorities taking the idea forward. We have heard recently about examples in Stoke and Cherwell. In Lewisham, the local Labour council is running a custom build scheme that allows residents to choose the design, select the contractors and specify individual requirements. In Labour-run Oldham, the council has bought and cleared land for a custom build scheme that will deliver at 20% below market value. Those are interesting initiatives.
I agree with the hon. Gentleman that we want to see this become a familiar mechanism, rather than simply being able to highlight some of the best examples. We would like to see it promoted across the country and the practice much more widespread. In that cross-party spirit, I would like to congratulate the hon. Member for South Norfolk on bringing forward the Bill, which will have the support of the Opposition.

Brandon Lewis: It is a pleasure to serve under your chairmanship, Mr Sheridan, particularly for this Bill. I also want to congratulate my hon. Friend and neighbour for South Norfolk on taking the Bill to Committee.
I agree with the hon. Member for Wolverhampton North East that this is a good way to add diversity to the market and raise the profile of custom and self-build in order to see more of it. Through the progress of the Bill and the conversations my hon. Friend has pushed into the public domain over the past few months, along with our consultation, we have seen this sector make a louder name for itself. As I travel around the country, more people are talking about custom build as a serious option and asking how they can get involved. That in itself is a good thing to have come from the Bill, let alone the practical differences it will make as we go forward.
One of those will be the establishment of local registers for custom builders, as introduced by the Bill. That forms the first element of the Government’s proposals for a new right to build. We want the right to build proposals to give prospective custom builders the right to acquire a plot of land with the help of their local authority to enable them to build their own home.
The hon. Lady makes the good point, echoed in interventions, about the type of tenure of custom build. Figures show it is an average of 20 years for people in custom build as opposed to six years in normal sales. That is a strong argument in favour of a cohesive community for custom and self-build. The register will enable for the first time prospective custom builders across the country to register their interest in acquiring a plot of land with their local authority, and it will ensure that local authorities have a clear understanding of the needs and wishes of individual custom builders.
The second and more radical part of the right to build, which the Bill does not legislate for, will require local authorities to offer at market value suitable plots of land to those on the register. Such offers will reflect the preferences about plots of land expressed by the prospective custom builder. We are consulting now more widely on the scope of the right to build, and the deadline for responses is tomorrow.
In September we launched 11 vanguards involving a wide variety of local authorities to test the practicalities of operating a register and making plots of land available to those with a registered interest.
I want to make detailed comments on specific clauses of the Bill so that the Committee is clear about the Government’s intentions. Before I do so, I will touch on a couple of specific points that were raised. There is cross-party agreement that we want smaller sites to be brought forward. I am delighted that we now have record levels of planning applications approved for homes—240,000 in the 12 months to the end of September, which is fantastic news—but we would all like to see more small sites. The industry tells us that one of the challenges is the regulation that makes it difficult for small builders to release small sites, not least when section 106 changes are involved. That is why we have made the threshold changes that we announced just in the past week or two, to make small sites more viable and easier to bring forward, particularly for small builders. It is also why we have introduced the extension to the builders finance fund to go directly to small builders. The hon. Lady might want to look at that, as it now does not simply underwrite but actually makes loans available for very small builders.
It is right that local authorities look at land provision, particularly in terms of their local plans and that they use them, as they are bound to do, to make provision for their community. Custom build and self-build should be a part of assessing what is right for their community. On the finance, the hon. Lady is right that the building societies have been predominant in this part of the market. I have been meeting them and others in the financial market over the past few months. There is a real challenge for the financial institutions in how they deal with custom and self-build, particularly where there are sporadic plots of land. If local authorities make particular areas available, it will make the administration and potentially the funding and financing easier as a side product.

Meg Hillier: Has the Minister had any discussions with mortgage lenders? In many areas of housing, this comes up as a problem for people who are looking to buy. The register would make it easier, but has he had any comfort from the industry?

Brandon Lewis: One of the things that I have found comforting is the growing recognition that the sector is growing, so there is a desire to be a part of that sector, to work with it and develop it. That is something we will look at over the next period of time, particularly as the Bill makes an impact.
Clause 1 has been drafted to allow the regulations setting the detailed framework for the operation of the register to be informed by the practical experience of the vanguards and the outcome of our consultation. That will ensure that the regulations are fit for purpose, especially regarding the format of the register, the eligibility criteria for registration on the register, and the information to be sought from applicants. I want to highlight a couple of elements of clause 1 and the accompanying schedule.
First, we recognise that different parts of the country have different housing and land markets, so the potential opportunities for custom build will vary considerably. Clause 1 allows some flexibility, around which local authorities should operate a register. This will be achieved by the Secretary of State’s order-making power enabling him to designate other relevant authorities to keep a register.
Secondly, the Government regard it as important that local authorities publicise the register. The right to build will work only if prospective custom builders are aware that they can register with their local authority for a plot of land. Although the Government do not wish to place an excessive publicity burden on authorities, there at least needs to be mention of the register on the authority’s website, not hidden away somewhere that nobody knows about.
Thirdly, I want to make it clear in relation to the power to make regulations about fees in the schedule that we envisage that in the first years after the initial establishment of the register, registration will be free, to encourage prospective custom builders to sign up. However, following the full implementation of the right to build, and once local authorities have established a solid track record of delivering plots to those on the register, there may be a case for allowing local authorities to charge appropriate reasonable fees. We envisage that charging a fee would be permitted on a cost-recovery or cost-contribution basis only. We believe it would be fair and proportionate for fees to be charged, given that prospective custom builders will benefit from the right to build. We are keen to ensure that the legislation at least has the flexibility to allow that.
Fourthly, I assure the Committee that the Government recognise that a statutory requirement for a register could impose a burden on local government. Our initial assessment suggests that the additional cost would be modest for a typical local authority. We are working with the vanguards to ensure we have a thorough understanding of the costs incurred when implementing a register and to develop best practice. That will help to ensure that the regulations and statutory guidance are cost-effective and proportionate, and it will inform the final new burden assessment for the Bill. We will share the findings from this with the Local Government Association as well. I can confirm that my Department will meet any new burden pressures on local government as a result of the Bill, in line with the new burdens principle.
Clause 2 will require local authorities to take account of the demand for custom build when discharging their planning, housing, regeneration and land disposal functions, giving the duty to maintain a statutory register real bite. The duty to have regard to the register builds on the national planning policy framework produced by this Government, which requires that local planning authorities, as I said earlier, should plan for housing based on need, including for those people wishing to build their own homes. Many local authorities such as Cherwell, which we mentioned this morning, Teignbridge and Stoke are planning for and taking action on the demand for custom build in their local area. I hope the new duty will empower all local authorities to take action to support custom build in their areas.
The duty to have regard to the register does not mean that an authority must prioritise custom build over other forms of development. There may be more appropriate uses for specific plots of land depending on local circumstances and, in the case of local planning, I want to make it clear that the duty is not intended to trump other statutory considerations, such as the green belt, areas of outstanding natural beauty and other environmental designations. However, it means that all local authorities will need to give more consideration to the merits of custom build. That will be a major step forward for the many thousands of prospective custom builders who wish to build a home of their own.
Clearly, there will be areas where the duty to have regard to the register will be more challenging, particularly in areas where there is high demand and limited land supply. Our consultation seeks views on such areas and the implementation of the register in London, where we are currently working with the GLA to assess the feasibility of a pan-London register.
Finally, I will say a few words about clause 3. It is important that the Secretary of State has the power to issue statutory guidance to local authorities about the duties under the Bill to maintain a register for custom builders, and to have regard to it in the exercise of key functions such as planning. The detail of the establishment and operation of the register is potentially complicated with technical considerations such as data protection and the interaction with the wider planning system, which will go beyond the confines of the regulations. It is important that local authorities discharge the duties, especially the duties to publicise and have regard to the register, in a proportionate way that does not lead to significant cost burdens on them. Having statutory guidance will help to achieve that.
Our guidance will be informed by the Government’s consultation, “Right to Build”, and particularly by the experience of the vanguards. Although the vanguard authorities were announced only in September, they are providing insights into how to implement custom build registers while having regard to functions such as planning, housing, regeneration and land disposal. It is interesting that some of the vanguards cover national parks. Those insights might, for example, lead to the guidance detailing data protection considerations, as well as the format that the register would take.
I envisage that the statutory guidance will deal with the method of publication of the register, drawing upon that learning from our 11 vanguards, which have already suggested a variety of methods of promoting the register, from hosting custom build workshops and working with local community groups, to publicising the register on their web pages and using social media.
The Government welcome the Bill. I personally congratulate my hon. Friend the Member for South Norfolk on his excellent work, along with the custom building organisations, communities, and people across the country who are interested in the sector. The Bill should help to ensure that more prospective custom builders are able to find suitable land to build or commission their own home. I am pleased to say that the Government support all the clauses.

Richard Bacon: I thank the Committee for its cross-party support. I do not pretend for one moment that the Bill will change everything overnight. The great nexus between the three great factors at play—land, finance and planning—is so complicated that one cannot expect any one piece of legislation, let alone a relatively small piece of legislation such as this, to make all the difference. Sometimes I hear people talking about the subject as if nothing can be done, asking, “Where will we get the land from?” Well, there are 93,000 square miles in the United Kingdom. It was the same 100 years ago and it will be the same in 100 years’ time. We have the land; we just need the systems and structures that enable it to work.
My fellow Public Accounts Committee member, the hon. Member for Hackney South and Shoreditch, referred to finance. The current chairman of the Council of Mortgage Lenders, Stephen Noakes from Lloyds bank, has attended several meetings of our all-party parliamentary group on self-build, custom-build and independent housebuilding over the past year, and is extremely supportive. I know that he and others in the financial sector and within the banks are looking at products that can work. They are after things that de-risk the profile of their lending to make it easier to do on a bigger scale. Of course, if serviced plots become the new normal, risk would be lowered and more finance would come in.
I would like to see local planners helped to do what is supposed to be their main professional aim of doing a good job—not being the person who always has to say no, but rather being a professional who is able to fulfil and honour their professional aim, which is to help shape local community in a sustainable and sensible way in accordance with what people want. If we can move the wheel gently in the right direction, I believe we will get closer to the day when we treat the building of all houses as if customers matter. If we get nearer to that day, we will do much more to shape community, make it easier to finance and reach a time when everyone who needs one—and that means many who currently do not—has a place to live.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 6 ordered to stand part of the Bill.

Schedule agreed to.

Title

Amendments made: 1, in title,line1, leave out “local” and insert “certain public”

This Amendment amends the long title to reflect the contents of the Bill as published.
Amendment 2, in title,line2, leave out from beginning to “land” and insert
“associations of individuals who wish to acquire serviced plots of”

This Amendment amends the long title to reflect the contents of the Bill as published.
Amendment 3, in title,line3, leave out “custom-build” and insert “custom housebuilding”

This Amendment amends the long title to reflect the contents of the bill as published.
Amendment 4, in title,line3, leave out from “to” to end of line 8 and insert
“place a duty on certain public authorities to have regard to those registers in carrying out planning and other functions.”.— (Mr Bacon.)

This Amendment amends the long title to reflect the contents of the Bill as published.

Bill, as amended, to be reported.

Jim Sheridan: A merry Christmas to everyone.

Committee rose.